Financing in Racine County>Question Details

Napoleon Har…, Other/Just Looking in Racine, WI

Finding Financing for Foreclosure it does not fit 203K req. streamline or regular . Just need a Good Lender!!

Asked by Napoleon Hardy, Racine, WI Fri Apr 3, 2009

I am quite familiar with the FHA 203K regular and streamlined. As well I have read the lenders Handbook for VA loans. The VA has provisions for a purchase with repairs option but I am having a difficult time finding a bank to handle this VA type loan. I guess my real question is how do you go about purchasing a REO that is selling under market value but requires repairs before it will pass inspection. even with the cost of repairs it will still be considerably under market. I am looking to owner occupy not flip. I am a Disabled Vet qualified for down payment assistance of 5K Good credit score VA eligibility certificate. Does anyone have the name of a Lender that works within these parameters? The biggest issue is escrowing of funds to complete repairs after closing and having 30 yr fixed mortgage.

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Has anyone spoken to you about a USDA loan? Obviously, the location of the home is factored in...but that might be the way to you can buy a home in disrepair, and improve EXTERIOR items for up to 10% of the purchase price, as long as it appraises HIGHER than the purchase price equal to that amount.

In other words:

Purchase Price: 100k
You can do 10k worth of repairs, improvements, like Siding, Windows, and a roof.
Appraised Value would have to be AT LEAST 110k obviously, but that is a SUBJECT TO value...which means..

Subject to these improvements...what is the value of the home.

Plus, the USDA Rural Housing Loans are NOT subject to the new HVCC rules!
ONe Source Mortgage, LLC
Lodi, Wisconsin
0 votes Thank Flag Link Fri May 1, 2009
Well here is an answer to both follow up questions. The FHA 203K is for amounts over $35K and can be used for structural and most other repairs. It is a lot of work for the lenders and it is difficult if not impossible to find a lender that will originate one of these loans. The 203K Streamline is less work and can cover repairs up to $35K but there are some limitations on the type of repairs. You should look at the regulations on that one... but the same problem exist. Finding a lender is next to impossible.

Now the VA issue.. the VA has provisions in the VA Lender Handbook section 7.04 that covers Purchase with improvement. But finding a lender that handles those is impossible. I have contacted over 50 lenders and none of them do these loans. I have contacted the VA Inspector General to complain because it is listed as a benefit but there is no way to use this benefit. I have a letter in to my Senator also on this issue because the VA recently released a circular that leads lenders to believe Purchase with Improvement for foreclosures will not be done. This contradiction is the reason I sent a letter to Congress. I would suggest in the mean time, possible check with your state for home loan programs that are either state VA guaranteed or just state housing authority guaranteed. This week my state announced they are going to be utilizing stimulus funds to finance a program to purchase foreclosures that need improvement. Keep in mind this does not use all the benefits associated wit being a disabled vet, but at this point I may not have another option if I want to get into a home durig these record low prices. I hope to hear something back from the VA IG or my Senator soon... But if you have ever initiated a Congressional Inquiry it can take a while. Good luck and if you have any other questions from a Vet stand point let me know, I have spent the last year with the manuals and regulations trying to get this done. I too want to purchase a home with my disability payments and live off any additional income. which you think lender would love because you are not borrowing so much that you can't pay it back, and the income stream is guaranteed.

Napoleon Hardy
Disappointed Disabled Vet
0 votes Thank Flag Link Thu Apr 23, 2009
I'm confused - why won't a regular or streamlined 203k work for this? i'm no expert, just curious...
0 votes Thank Flag Link Thu Apr 23, 2009
Napoleon, I am asking about the same question as you, please tell me if you have recieved any information on your matter. I am also a disabled veteran with similar situation and have a good credit score also (first time buyer to boot). I am looking either for a lender or the VA to give me money to fix up a property that I want to buy and don't understand how to to it with a seller that doesn't have the money and wants to short sale the home... all advice considered, thanks !!!
0 votes Thank Flag Link Thu Apr 23, 2009
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